Lagging Indicator
An economic measure that confirms a trend after it has already begun — useful for validating cycle phases but not for anticipating them.
A lagging indicator confirms economic trends that are already underway. Classic examples include the official unemployment rate, GDP (reported 30+ days after quarter-end), corporate earnings, and CPI (which can lag real-world price changes by weeks).
Lagging indicators are important for confirmation and policy calibration, but trading on them alone means you're often late. Central banks have historically been criticized for reacting to lagging data — tightening only after CPI spikes and cutting only after unemployment rises — contributing to boom-bust cycles.